WASHINGTON – U.S. businesses boosted their stockpiles in September by the largest amount in three months, while sales were flat.
Businesses increased their inventories 0.3 per cent in September following a modest 0.1 per cent rise in August, the Commerce Department reported Friday. It was the biggest gain since a 0.7 per cent rise in June.
Sales were unchanged in September after a 0.6 per cent drop in August.
A major effort to work down an overhang of unsold inventories was a big drag on the economy in the summer. That shaved 1.4 percentage points from overall growth as measured by the gross domestic product, which slowed to a modest gain of 1.5 per cent.
GDP growth in the July-September quarter was less than half the 3.9 per cent growth rate in the previous three-month period.
Economists are looking for growth to accelerate in the current quarter. Strong employment gains are expected to boost consumer spending, prompting businesses to resume restocking their shelves.
The government reported last week that that businesses created 271,000 jobs in October, the largest amount all year, pushing the unemployment rate down to 5 per cent.
Friday’s inventory report showed that stockpiles held by retailers rose 0.8 per cent in September, with wholesale inventories up 0.5 per cent. Manufacturing stockpiles fell by 0.4 per cent.
A separate report Friday showed that retail sales rose a tiny 0.1 per cent in October, a modest gain that was held back by lower gasoline costs.